Manitoba consortium and Shaw apply for wireless spectrum

11 Mar 2008

Manitoba Telecom Services (MTS) and Shaw Communications yesterday submitted applications to bid in the forthcoming 2GHz band mobile spectrum auction in Canada, scheduled for late May, reports The Canadian Press. MTS, the incumbent fixed line operator and CDMA mobile operator in the province of Manitoba, is partnering the Canada Pension Plan Investment Board (CPP) and the Blackstone Group to bid in the CRTC’s Advanced Wireless Services (AWS) frequency auction, in which 40MHz in all regions has been reserved for new entrants. The consortium made a CAD340 million (USD343 million) deposit in the form of letters of credit to Industry Canada ahead of the Monday deadline for submissions. MTS, CPP and Blackstone will each own approximately one-third of the new frequency holding entity, the companies said. ‘We are moving towards the auction with exceptionally strong partners, a clear and disciplined strategy, and a focus on creating long term value for our shareholders,’ said Pierre Blouin, CEO of MTS. Western Canadian triple-play cableco Shaw Communications also announced that it submitted an application yesterday, but, confusingly said its participation should not be interpreted as an indication it wants to build a wireless network, and that the spectrum may ‘provide strategic flexibility.’ The CRTC recently confirmed that the new spectrum allocations would carry a commitment to roll out infrastructure. However, according to the Financial Post, the regulator’s rules will allow Shaw to sell the spectrum to established national mobile operators Rogers, Bell or Telus after five years. The paper quoted an anonymous analyst as saying ‘it is possible to buy [spectrum] at a low, subsidised price and then sell it at fair market value – likely three times higher – in five years.’

Other confirmed applicants for the auction include Globalive Communications, parent of long-distance call provider Yak Communications (Canada), while the parent of cableco Videotron, Quebecor, has said will invest CAD500 million to build a wireless network in Quebec. Videotron currently offers quadruple-play packages including mobile phone services by operating as an MVNO over Rogers’ GSM network in the province. Unique Broadband Systems and its subsidiary Look Communications have speculated about entering the mobile market. Look currently holds around 90MHz of spectrum in the 2.6GHz to 2.7GHz frequency band. Another of Canada’s major cablecos, Cogeco, has said it is not interested in bidding for wireless spectrum.